The Australian share market looks like it may be in for a weaker start this morning following falls on Wall St at the end of last week.
US stocks took a tumble on Friday following weaker than expected quarterly earnings from Bank of America and Citigroup and sharp fall in consumer sentiment.
In economic news out of the US: The University of Michigan’s consumer sentiment index dropped to a read of 66.5 in July from 76 in June. The read was way below economist’s expectations for a fall to 74.5.
The Consumer Price Index, a measure of inflation fell 0.1% in June after falling 0.2% in May.
The so-called core CPI, which takes out volatile food and energy prices, increased 0.2% in June on expectations for a 0.1% rise. On Friday, the Dow Jones Industrial Average closed 261 points lower at 10,098. The S&P 500 Index is lost 32 point at 1,065 and the NASDAQ is down 70 points at 2,179.
European stocks were also lower; London’s FTSE down 52 points, Paris is down 82 and Frankfurt down 109.
To Asian markets: Hong Kong’s Hang Seng down 5 points on Friday, Tokyo’s Nikkei down 277 and China’s Shanghai Composite closed flat.
The Australian share market finished weaker on Friday. The S&P/ASX 200 Index closed 20 points lower at 4,423 and on the futures market the SPI200 is down 79 points. Turning to currencies and the Aussie Dollar at 7:30AM was buying 86.64 US cents, 56.67 Pence Sterling, 74.98 Yen and 67.16 Euro cents.
In local economic news: The ABS is to release data on international merchandise imports for June.
In business news: Shares in private hospital operator Healthscope Ltd (ASX:HSP) declined 0.18% to $5.40 last Friday. According to a report in The Australian this morning, a consortium of TPG and Carlyle has won the bidding race for the Aussie company. The consortium out bid fellow US rival Kohlberg Kravis Roberts after final bids were lodged last Friday, ending a two month long battle to gain control of the hospital operator. The Australian says it understands that the final offer price was $6.26 a share, above initial indicative offers of less than $5.80 a share. It is believed that an announcement will be made this morning regarding the winning bid. Healthscope reported a profit of $72.29 million for the 2009 financial year.
Shares in troubled drug maker sigma Pharmaceuticals Ltd (ASX:SIP) slipped 11.58% to $0.42 at the end of last week. The company has reportedly received three bids for its health business Herron and another three for its Orphan Australia drugs division. The company is looking to offload some of its non-core assets to relieve some of its debt burden. The report in The Age suggests the interest may be enough for the company to fend off a takeover bid from Aspen Pharmacare and help it pay down debt. Sigma last week downgraded its earnings for the third time in six months, is struggling to repay $100 million in debt to its lenders. Sigma posted a loss of $389.04 million for the year to January 30, 2010.
Turning to ex-dividends: and there is just one company going ex-dividend today and that is Euroz with a 10 cent fully franked dividend. Coming up tomorrow is Mirrabooka Investments.
To commodities, and the price of gold fell $20.10 to US$1,188 an ounce for the July contract on Comex. Silver is down $0.57 cents to US$17.77 and copper is down 8 cents at $2.92 a pound.
And the price of oil is down $0.61 to US$76.01 a barrel for August light crude in New York.
